Correlation Between JPM BetaBuilders and JPM China

Can any of the company-specific risk be diversified away by investing in both JPM BetaBuilders and JPM China at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining JPM BetaBuilders and JPM China into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JPM BetaBuilders China and JPM China A, you can compare the effects of market volatilities on JPM BetaBuilders and JPM China and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in JPM BetaBuilders with a short position of JPM China. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM BetaBuilders and JPM China.

Diversification Opportunities for JPM BetaBuilders and JPM China

0.85

Correlation Coefficient

JPM BetaBuilders  JPM China

Very poor diversification

The 3 months correlation between JPM and JPM is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding JPM BetaBuilders China and JPM China A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM China A and JPM BetaBuilders is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on JPM BetaBuilders China are associated (or correlated) with JPM China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM China A has no effect on the direction of JPM BetaBuilders i.e., JPM BetaBuilders and JPM China go up and down completely randomly.

Pair Corralation between JPM BetaBuilders and JPM China

Assuming the 90 days trading horizon JPM BetaBuilders China is expected to generate 0.15 times more return on investment than JPM China. However, JPM BetaBuilders China is 6.57 times less risky than JPM China. It trades about 0.08 of its potential returns per unit of risk. JPM China A is currently generating about 0.01 per unit of risk. If you would invest  8,596  in JPM BetaBuilders China on April 24, 2025 and sell it today you would earn a total of  847.00  from holding JPM BetaBuilders China or generate 9.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

JPM BetaBuilders China  vs.  JPM China A

JPM BetaBuilders China

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPM BetaBuilders China are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JPM BetaBuilders is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

JPM China A

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPM China A are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JPM China may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with JPM BetaBuilders and JPM China

The main advantage of trading using opposite JPM BetaBuilders and JPM China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPM BetaBuilders position performs unexpectedly, JPM China can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in JPM China will offset losses from the drop in JPM China's long position.

The idea behind JPM BetaBuilders China and JPM China A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.